June 3, 2011 / 10:38 PM / 9 years ago

Rivalry emerges between Vevo and YouTube

DENVER (Billboard) - Competition over the increasingly lucrative rights to stream concerts live over the Internet is pitting close partners Vevo and YouTube against one another.

Take, for instance, Bonnaroo. The June 9-12 festival in Manchester, Tenn., will be streamed exclusively on Vevo. Last year, YouTube had the rights.

What happened?

“They decided it was really important to them to get that on an exclusive basis and were willing to pay for it,” YouTube VP of business development Chris Maxcy says. “We competed with them, and they won.”

Not that YouTube hasn’t scored its own big events this year. In April, it live-streamed the Coachella festival in Indio, Calif. And bidding is under way for the rights to upcoming festivals like Lollapalooza and Outside Lands, among others.

The competition for live-streaming rights has “definitely increased,” says Jonathan Mayers, president of Bonnaroo co-producer Superfly Presents.

“These different platforms are looking for association with premium brands and the artists and the events,” Mayers says. “That space is more active than it’s ever been.”

That’s because there’s big money to be made. Vevo only began airing live concerts on its site last year, but already CEO Rio Caraeff says such deals are driving revenue into the mid- to high seven figures, and attracting between 5 million and 10 million unique viewers for each event.

“We wouldn’t be doing this if we didn’t think it was a critical thing to do,” Caraeff says. “It’s a pain ... But if you’re to build a premium video experience and distribution company, you can’t rest on other people’s music videos.”

Vevo was created to corner the market, largely, on those music videos. Any Web outlet that wants to stream music videos from Vevo stakeholders Universal Music Group and Sony Music Entertainment and that of content partner EMI Music Group, has no choice but to syndicate through Vevo.

The only music videos YouTube doesn’t need to syndicate from Vevo are user-created clips and live events. In addition to last year’s Bonnaroo and this year’s Coachella, YouTube has hosted live streams of performances by U2, Paul McCartney and Bon Jovi. Maxcy says the company hopes to add “substantially more.”

“Users like it and the advertisers like it as well,” he says. “The growth curve online in terms of the revenue generated is phenomenal, and I expect it to be a meaningful proportion of our overall revenue as we push forward into the next 12 months.”

YouTube’s advantage is its massive user base and global presence. In May, the company disclosed that it streams 3 billion videos per day. It’s also available worldwide and has a massive advertising sales force.

By contrast, Vevo is available in only three countries, with a fraction of YouTube’s audience and a far smaller sales team. So it is competing on features and relationships. Vevo’s mobile and iPad apps let live-stream viewers choose from multiple camera angles, for instance. The mobile app can also alert users when a live event is about to start, and Caraeff says half of Vevo’s six million mobile users opt in for that feature. In all, he says, 15 percent of Vevo’s live-streaming traffic comes from mobile or iPad devices.

But Vevo’s ace in the hole is its label relationships. While the labels hold no rights over artists’ live events, they do wield influence with the managers and artists who may be considering adding a live-stream component to their concerts. They also have relationships with YouTube and, as Vevo stakeholders, try to persuade YouTube to involve Vevo in any live-streaming initiatives.

“There are times when the labels will say they really want us to partner with Vevo on something because they’re an owner in that company,” Maxcy says. “But there’s also an equal number of cases where artists, managers or labels come to us saying it’s just easier to work directly with YouTube.”

Despite their burgeoning rivalry over live-streaming rights, Vevo and YouTube are equal partners in a live series called “Unstaged,” sponsored by American Express, that has aired live concerts by Arcade Fire, Duran Duran and most recently My Morning Jacket. And Caraeff insists that Vevo only plans to exclusively host around four exclusive “tentpole” events per year.

But there are only so many big-ticket events-like Bonnaroo, Coachella or a tour stop by a superstar artist-that can serve as cornerstones for a live-music strategy. These are the kinds of events that YouTube and Vevo are vying for.

“We can bump up against them in the marketplace, but I think it’s a healthy competition,” Caraeff says. “It’s healthy because it creates choices and options for artists and event producers and for consumers. It causes everybody to do a better job, work a little bit harder and create a better experience.”

Editing by Chris Michaud

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